With job insecurity on the up, before handing over our cash or credit cards we’re stopping, thinking, and asking ourselves do I really need this, and can I really afford it? So far, so sensible, but there’s no need to embrace frugality with too much fervour – with a little shopping savvy it’s possible to make some seriously smart savings and still afford the odd treat too…
Cash back credit cards
This is simply another form of reward scheme, instead of collecting points you receive hard cash, tax-free, every time you use one of these cards. The advantages are clear – the flexibility of cash means you can spend it anywhere, on anything rather than being restricted to specific retailers, and it’s easy to work out how much you save. Saving anything at all relies on your ability to pay off the card, in full, on a monthly basis, or interest will wipe out any gain you make through cash back. Remember, card companies aren’t altruistic – they offer you rewards to entice you to spend money on the card which they can then earn interest from. If you’re in any doubt that you’ll be able to make payments in full, don’t apply for the card.
Click to save
Price comparison websites and shopbots (shopping robots) are special sites designed to help you find the cheapest price for everything from CDs to car insurance. Simply enter the details of the product or service you’re after, click on ‘compare prices’ and you’ll be given a list of retailers ranked in order of cost.
Comparison sites make their money by taking a small percentage of whatever’s purchased- while this won’t affect how much you pay for your product, it does mean that each website may cover a different range of retailers.
Golden rules:
1 Use more than one price comparison site in every search.
2 Stick to well known shopbots – they vet all the retailers they list, so you don’t have to worry if the company you’re buying from is legitimate. The big names for shopping include www.kelkoo.co.uk, www.pricerunner.co.uk, www.moneysupermarket.com and www.shopping.com
Loyalty schemes
Consumer loyalty is something most people practise without even thinking. There might be fantastic deals in Tesco one month, and Asda the next, but if you only shop in Sainsbury’s, familiarity and convenience mean it’s unlikely you’ll switch.
Companies have picked up on this and now offer incentives through point collection, which appears to reward consumer loyalty with financial gain. But beware. The feel-good factor generated by collecting points far outweighs the actual impact such schemes have on your pocket.
You may feel as if you’re getting a bonus every time you hand over your card at the checkout, as the points you save up can be redeemed against future purchases or air miles etc. But these schemes are often made deliberately complex so it’s hard to unravel how much you’re actually saving in the long run – so you’re left thinking you’re saving more than you are.
The best scheme on the high street is the Boots Advantage card, which awards customers four points for every £1 they spend. Each point is worth 1p in Boots stores, giving a 4% discount on every purchase. But while it seems sensible to buy all of your toiletries in Boots in order to collect points, if any product is more than 4% cheaper anywhere else it is more cost effective to buy it there.
Golden rule: don’t be swayed by loyalty schemes, look for the shop offering the cheapest price on your desired purchase and buy it there.
Drive smart
The best advice for saving money on petrol is to leave the car at home and walk, cycle or hop on the bus. But in reality there are times when a car is the only practical way of getting you from A to B, and as a result ever-increasing petrol prices can be a real drain on your finances.
- The lighter your car is, the less hard your engine will have to work in order to accelerate – so simply getting rid of all that junk in your boot can improve fuel efficiency.
- A full tank of petrol also adds considerable weight to your car so only fill the tank half or three-quarters full.
- Lower tyre pressure increases the drag on a car meaning you need more fuel to keep it moving, so keep your tyres pumped up.
- Removing roof racks and shutting your car’s windows also decreases drag and improves efficiency
- Turn off your engine when stationary.
- The biggest energy-saving measure is to turn off your car’s air conditioning, which uses a huge amount of fuel.
Petrol prices can vary by as much as 5%, which translates to significant savings during the course of a year. The website, www.petrolprices.com tracks down the cheapest places to fill up your tank. Register your details, enter your postcode and exactly how far you’re prepared to travel (choose from between two and 20 miles) and the website will list the cheapest petrol stations in your area. Or you can go to www.keepmoving.com which also offers easy route planning, up-to-the-minute traffic updates and newsflashes as well as comprehensive fuel price information on your route.
Money sense…Retailers don’t always offer the same deals in their shops as they do online, as the running costs (e.g. rent and electricity) are considerably greater. This means buying a DVD online from HMV for example, is on average £1-£2 cheaper than buying it in store.
